Do you think two sentences following are the same?
(1) He wears baggy shirt and trousers with small holes
(2) He wears baggy shirt with small holes and baggy trousers with small holes.
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How critical is it that your reader understand that both the shirt and trousers are baggy and have small holes?
The first sentence is definitely ambiguous; it could be read as (baggy shirt) and (trousers with holes). However, it could also be read as baggy (shirt and trousers) with holes.
If you really want to be clear that both are baggy/holey, you might want to reword it: His shirt and trousers are baggy and dotted with small holes. (Or, if you're pointing his normal style of dress, you could say The shirts and trousers he wears are baggy and full of small holes.